The legacy of Hugo Chávez: Low growth, high inflation, intimidation

...Chávez's sustained electoral success is remarkable because he managed to achieve it despite a dismal economic and social performance. Since 1999, the year he took over the presidency, Venezuela has had the lowest average GDP per capita growth rate and the highest inflation of any Latin American country except Haiti. It has also seen a fivefold increase in assassinations to arguably the highest murder rate in the world. In spite of having the largest oil reserves in the planet, he managed to reduce Venezuela's share of OPEC oil output from 4.8% to around 3%. He also managed to stimulate the largest out-migration of Venezuelans in memory.

How can electoral success be achieved under such weak foundations? It is not easy. It helps if the price of oil increases fivefold. That way, consumption can increase even if domestic production does not. The government can distribute its increased oil rent to alleviate poverty, garner support and win favors. But previous governments in Venezuela and elsewhere that have benefited from oil price hikes have not had the same electoral success.

How did Chávez do it? ... First, undermine checks and balances. You can use it to eliminate any separation between party and state, so as to make government social programs a privilege of the loyal, not a right of all deserving citizens. Create a very large civilian army of political activists that are handsomely compensated by the state for their party work. Limit individual rights, expand controls on everything, including prices and access to foreign currency, and give yourself the power to nationalize any business you choose. That way, people will not want to get on your bad side. "Judicialize" politics by using the courts to put your enemies in jail or threaten them with prosecution. Make it really costly for people to oppose you. Let your collaborators steal generously, and make sure that they know you know about it. That way, they will never dare to betray you.

Second, dominate the airwaves. Limit the airing of critical views with carrots, such as government spending on ads, or by threats of fines, jail or expropriation. Act on these threats with some regularity to refresh people's memory. Leave some room to your adversaries but make sure you achieve a 30-to-1 balance of airtime. That way you can create your own narrative and prevent them from creating theirs....

41. I've heard he's hell on wheels when he drives that damned RED VW. What a shame.

2. "The government can distribute its increased oil rent to alleviate poverty" yeah that really sucks.

Under the prior neoliberal regime increased oil revenue went were god intended it to go, into the pockets of the wealthy elites and global corporations. Hopefully after god intervenes and ends Chavez's reign, the natural order will return, and all the rich fucks hanging out in miami can come back and reclaim their rightful position in the revenue stream.

6. I think it would be nice if the corruption and cronyism stopped.

It would be nice if the nation's oil wealth would be used to help the poor, without skimming, cheating, and diversions... and they shouldn't make slavish loyalty to a political party the contingency for getting assistance.

And they do.

Not everyone who left VZ is a "rich fuck" living in Miami. Some people--very ordinary people--just didn't like things like the murder rate, the inflation rate, and the rampant corruption in the country, so they flee to places far less fancy than Miami.

12. That is false and an ignorant view. Venezuela's oil was nationalized.

It was nationalized for decades before Chavez came to power. Chavez just enabled the Fonden Fund whereb billions disappeared without accountability and enabled the Aben Pearl where $700 million vanished in a Singapore based shell corporation ran by three people.

The problem was that before Chavez oil prices were low, and the money flow was not that great. With the post-9/11 oil price surge (largely due to China and India's exponential growth) Chavez was able to exploit the high oil prices and do something with it.

Meanwhile his biggest business partner was his favorite Emmanuel Goldstein. The United States.

If Venezuela was ran as Brazil or Chile over the same time period then Venezuelan poverty and crime would be minimal at best. Instead it was squandered in cronyism.

14. It was effectively and illegally denationalized in the 80s and 90s.

15. Heh, "effectively." Please substantiate.

PDVSA had contractual partners in Exxon and Conoco but they were business partners. PDVSA still controlled revenue sharing, and they were the only two companies that refused the buy out (ie, "nationalization" that so many people are familiar with; Chavez did not nationalize the Venezuelan oil industry, he spent excessive amounts of money paying foreign corporations to let his cronies run their companies). During that time PDVSA was one of the most streamlined and best oil companies in the world. Now they have factories blowing up, oil rigs sinking, and spills on a regular basis.

17. That was due to the decline in oil prices.

Granted, due to PDVSA management ignoring OPEC quotas and making as much oil as possible. When oil prices fall below a certain threshold the oil company itself must pay itself to keep its employees and its operations in order. Not only that, PDVSA was overstaffed in that time, as well. (Never mind that it currently is one of the largest employeers of anyone in Venezuela).

I'll grant you that Chavez implementing quotas and slowing the flow of oil allowed prices to go up internationally and did have an effect. It still remains a fact that the oil profits that PDVSA enjoyed throughout Chavez' tenure is the only way anything could get done. And it still remains a fact that Fonden is unaccountable and PDVSA is the apex of corruption throughout Venezuela (don't believe me, PDVSA has had many shakeups over the years).

That said, it remains a fact that had Venezuela implemented Chile-like or Brazil-like policies poverty would've been reduced, and without the massive increase in crime:

Countries of all political stripes in Latin America enjoyed a reduction in inequality in the 2000s. Nonetheless, the region continues to be the most unequal one in the world, and while in the last decade social policy became more pro-poor, in most countries public spending continues to be neutral or regressive. In this paper we show that there is more to the story, however. In some countries the politics of redistributive policy appears to be changing in a fundamental way, suggesting that in those countries at least the recent declines in inequality are likely to stick.

On the basis of our econometric analysis and our comparison of governance and other characteristics, we conclude that in the social democratic regimes at least (but not in the populist regimes), the inequality decline is the outcome of what might be called a structural change. In contrast, in the populist regimes our evidence indicates that the declines in inequality have been due more to good luck than to good policy; that in Argentina and Venezuela inequality levels fell from levels higher than they had been historically is consistent with the good luck explanation.

23. Yup. Dan Beaton responds:

Hausmann writes, "Since 1999, the year took over the presidency, Venezuela has had the lowest average GDP growth rate and the highest inflation of any Latin American country except Haiti."

<snip>

In fact, Brazil, Mexico, El Salvador, Guatemala, Jamaica, Nicaragua, Paraguay, Uruguay, and other countries all had lower average GDP growth than did Venezuela since 1999, according to IMF data.

<snip>

Hausmann then claims that Chávez “dominate the airwaves,” even though Venezuelan state television has a 5.4 percent audience share while more than 94 percent of the TV seen by Venezuelans is not pro-government.

25. thanks

I suspected that the economic growth thing was bogus. That being said, the second "de-bunking" is not really a debunking as although the state television is only a 5.4% rating, Chavez forces the other stations to carry his messages.

5. I think his assessment is, even if you don't like the source, accurate. Chavez is on his way out.

...A source inside said staircases to the ninth floor had been barred, and that the only doctors treating Chavez were Cubans....Defense Minister Diego Molero addressed the tweets directly: he denied there was a rift, saying Maduro and his ministers were working "in perfect harmony" with the military, and that the armed forces were "more united than ever, waiting for the total recovery of our Commander Chavez."

The possibility of such a recovery looks increasingly remote. Last week, Chavez's friend and leftist ally, Bolivian President Evo Morales, said he had been unable to see the Venezuelan leader during a visit to Caracas because he was receiving treatment.

Given Chavez's clearly delicate condition, opposition supporters scoffed days later when Maduro said he and other government officials had held a series of meetings with the president on Friday that lasted more than five hours....

When the damn leader of a neighboring nation stops by specifically to see the guy, and the Cubans don't let him in, things aren't going well.

9. No--Venezuelan medical care is Cuban doctors--he trades oil for MDs and other

tech professionals. They are capable--very much so--but their paradigm is to do more with less.

He should have gone to Brazil. For political reasons he didn't want to go to USA (which does the job very well; some would say we're still Number One in many medical aspects) but Brazil has an outstanding reputation for treating cancer in his neck of the woods.

11. Well, secrecy was a big part of it, I think.

Four operations ago, he was hoping, I suspect, that they could just cut it out and he would go on with his life. I think his care was badly botched, but who knows, maybe he wasn't a good patient, maybe the cancer was incurable from the get go. There's no transparency down that way, the rumor is that it's sarcoma (death sentence, pretty much); we wouldn't tolerate this kind of obfuscation, month after month after month.

The other part is the "special relationship" between Cuba and VZ. It's very symbiotic, and I think Cuba has lead in their dance, despite the fact --or maybe because of the fact--that Chavez has all that oil. They want to be very paternal, providing him with guidance from his avuncular elders as well as Cubans trained in all manner of useful things (doctors and nurses most prominently, but people with military expertise, too), and they also rely on the VZ oil.

It's why the 9th floor of the hospital is crawling with Cuban doctors, not VZ ones.

35. Whether Chavez dies or not, the Bolivarian Revolution will go on, because it is...

..."of, by and for the people."

This leftist democracy revolution was made by the people of Venezuela, defended by the people of Venezuela during the 2002 coup attempt and other rightwing efforts to bring down the legitimate, elected government, and has been supported by the people of Venezuela, in election after election--including, for instance, the recent gubernatorial elections (a near sweep by the chavistas), just after Chavez was re-elected--in an election system that Jimmy Carter recently stated is "the best in the world." The Venezuelan people have also actively participated in this government. It is an inclusive government with many programs aimed at public participation.

They are not about to abandon a political revolution that has been so beneficial to so many people, and to their society in general and to their standing in the world. Chavez will be sworn in and his vice president, Nicolas Maduro, will become president if he dies. And, if the rightwing forces a new election, Maduro will win it--just as Harry Truman did, after FDR died. And that really is the point--that the Venezuelan people have created their own "New Deal" and they are not going to give it up. The rightwing in collusion with hostile powers may cause a lot of trouble. That is their history--despite the slick cosmetics of their candidate, Capriles. But Venezuela's majority is so sturdily supportive of this political revolution that I think they can weather whatever crap is being planned.

Chavez may surprise everybody and live, and finish his term. I just saw a recent poll that 60% of Venezuelans believe that he will recover. They may be wishfully thinking, because Chavez is such an icon of all that they have gained. I tend to think they are mistaken--and that Chavez is probably terminally ill. But, whatever happens in that respect, and despite the hopes and schemes of the rightwing and their hostile power allies, I don't think they can destroy this healthy and long overdue revolution.

It is the singular most serious journalist crime of the corporate press, in regard to Venezuela, that they IGNORE the people of Venezuela and their critical role as grass roots activists, awesome organizers, citizens and voters, in the political revolution that has occurred within their own country and as inspiration for political revolutions in other countries. They are completely disregarded. Chavez is built up into a phantom figure--a bogey man--in the corporate press--and who he really is, a mere president, more than most leaders beholden to his people, is lost in the inside out, upside down, backward Wonderland of corporate news.

Chavez is an important leader because he has RESPONDED to the "will of the people"--and he has most certainly been outspoken--but he is only a part of the story of Venezuela over the last decade or so, and maybe even a surprisingly small part, compared to how important the people of Venezuela are. Venezuela's political revolution has truly been from the ground up. It is a grass roots revolution.

So, all those who think that, if Chavez dies, the Bolivarian Revolution dies with him, are very wrong. There most certainly are plans to interfere with and demoralize Venezuelans, using Chavez's death or incapacity as their opportunity. They are going to fail, and some will be surprised at their failure (those who get all their impressions from the corporate press). The Venezuelan people are not going to give up their "New Deal." And those forces who want desperately to rid the world of that "New Deal" are going to need as many decades to accomplish it as it took them here, to rid the world of OUR "New Deal." (3 to 4 decades, to half a century, depending on what date you choose as the beginning of their destruction of the U.S. "New Deal"--I date it from November 22, 1963.)

It is a long and difficult process to rob a democratic people of their democracy and to rob them, literally, of their income and assets and "the commons." Though Latin America's achievement of democracy--especially leftist democracy, in countries such as Brazil, Ecuador, Bolivia, Uruguay, Argentina and others, as well as Venezuela--is not long lived--all are only decades away from heinous rightwing dictatorships and/or military rule, or other forms of oppression--their commitment to democracy is passionate, in its newness--rather like we were, in past times.

The majority of people in all of these countries are greatly BENEFITING from democracy--democracy with fair and honest elections and high levels of public participation--as we once did. They have voted for more equal distribution of wealth, for fair taxation, for more social programs, for more education and infrastructure development, for strong regulation in the interest of "the Commons," for universal health care and pensions and labor rights, for independence and sovereignty and for better, more inclusive, government. They are on fire with "New Deal" ideas and programs, and these ideas and programs have been instrumental at generating and spreading wealth. All of these economies are successful--in the teeth of the Bush Junta-instigated worldwide depression. And the governments, the economies and the people are also newly interconnected--have created new regional institutions to work together for the common welfare of the region.

Venezuela was the pioneer of this revolution. Neither Venezuelans nor these other populations are going to give up these gains, because one important leader has died. It is just not going to happen. The transglobal corporate monsters who rule things here may succeed at destroying this leftist democracy revolution in the long term, over the decades--in 20 years or 50 years. They are certainly intent upon it; they absolutely hate this Latin American exception to their global rule. But it is not going to happen because Chavez died.

18. So here is the question:

Since 1999, the year he took over the presidency, Venezuela has had the lowest average GDP per capita growth rate and the highest inflation of any Latin American country except Haiti.

Is the quoted statement true? I was a fan when Chavez was elected, and have since been disillusioned. But, in the end, is the above statement true? Is in fact average GDP growth rate per capita the lowest in LA? That seems hard to believe.

20. You would think, with all of that oil (and the attendant price

increases of said oil over that period of time) that the figure would not be that. I agree, it is a surprising statement.

I tend to disregard the quoting of GDP figures over time--there are so many ways to play a "figures lie/liars figure" game, depending upon what numbers are used. That said, VZ has been underperforming for a long time, given their natural assets, and they do have a vicious inflation and money supply problem.

22. I think a lot of the figures out of many countries are, if not bogus, certainly

suspect. After all, it's usually the "national bank" or some other economic entity married to the governments in power that are making these pronouncements. Certainly, particularly in countries that do not possess a robust or effective opposition that has some role in the governing process, these governmental economic representatives will do all they can to smooth over the rough spots if they want to keep their jobs. All politics is local--and one can't get more local than one's own paycheck!

Even at that, though, it's possible to get an idea of trends. And the trend in VZ suggests not enough bang for the buck, inefficiencies, waste, corruption, etc. It's like they've got the materials, but they don't have a contractor who will whip everyone into shape to organize the construction...!

24. This article is full of outrageous lies by a known liar (Ricardo Hausman) and is typical of the crap

that the Guardian (the Guardian!) has published over the last decade slamming, and lying about, the South American Left. (Rory Carroll is one of the other lying liars they publish).

That Venezuelan voters have consistently voted for Chavez and other socialists--including the recent presidential election and the socialist near sweep of the gubernatorial elections--because those voters have been "bought," is a damn lie of the twisted 'Tea Party' variety (upside down, inside out & backwards, like "Alice in Wonderland").

You might as well say that U.S. voters were "bought" when they gave FDR four terms in office!

When leaders OBEY THE WILL OF THE PEOPLE, by insuring FAIR distribution of wealth, by strongly regulating the greedy and the conscienceless rich, by turning massive poverty around into upward mobility, by alleviating mass suffering inflicted by the malfeasance of the rich, by preventing speculation and crashed economies, by FAIR taxation, by political inclusiveness, and all the other things that most people want, the rightwing way to look at it is that those voters have been "bought," but the rightwing way to look at it is WRONG. Egregiously wrong! What you are looking at, when leaders OBEY THE WILL OF THE PEOPLE, is DEMOCRACY.

Facts:

Jimmy Carter recently said that Venezuela's election system is "the best in the world." Jimmy Carter and the Carter Center know what they are talking about. They closely monitor hundreds of election systems around the world. It is their special mission.

The UN Economic Commission on Latin America and the Caribbean recently designated Venezuela "THE most equal country in Latin America." Needless to say, huge income discrepancies--the rich few getting richer, the poor majority getting poorer--is one of the biggest threats to democracy, as well as violating human rights and justice. It is a major problem in Latin America, and here. Venezuela has made the most progress in Latin America at reducing this income discrepancy. It is now "THE most equal country" in the region--identified as such by an outside, international, economic commission.

The Millennium Project (in which the U.S. State Department has a hand, as well as private entities) said the same. Venezuela has met ALL of its Millennium goals (which include poverty reduction, access to education and other indicators)--an unusual achievement.

A private, independent pollster (Gallup) recently established that Venezuela's citizens rate their own country among the highest in the world (5th, of all countries) on their own sense of well-being and future prospects.

And Venezuela's elections have proven, time and again, that, with all the exposure of the Chavez government over the last decade, and despite the vicious antagonism toward that government by the corporate press, Venezuelans OVERWHELMINGLY approve of the Chavez government. No government on earth has received the scrutiny that the Chavez government has. Everything that goes wrong in Venezuela is headlined by the corporate press around the world, and none of the Chavez government's considerable achievements are EVER MENTIONED. The corporate press has FAILED to defeat that government, despite its most strenuous efforts. Venezuelans make up their OWN minds about what is important and what is not, and what is a damned lie and what is not, and vote accordingly, in "THE best election system in the world."

This, more than anything, to me, verifies the excellence of Venezuela's democracy. In the teeth of the corporate press, Venezuelans make up their own minds and vote accordingly. But don't take my word for it. Consider this comment by the former president of Brazil, Lula da Silva: "They can invent all kinds of things to criticize Chavez but not on democracy."

The Chavez government has, in fact, empowered the poor majority--or, to put it more accurately, the poor majority has empowered the Chavez government to act on its behalf. They even rescued Chavez from the 2002 U.S. supported, rightwing coup d'etat, and rallied to their government's side during the oil bosses' lockout, the USAID-funded recall election and dozens of other efforts to crash the economy and/or destroy the country's government.

It is simply NOT THE CASE that the Chavez government has "bought" the voters. The Chavez government has RESPONDED TO THE WILL OF THE PEOPLE, and that will includes ending rule by the rich and the corporate, and FAIR distribution of wealth and opportunity. THAT is democracy at its best. But, to the conscienceless rich and the rightwing, and their corporate media lapdogs--which, very unfortunately, now includes the Guardian--democracy is an abomination. They are compelled to call it tyrannical and corrupt, just as those same forces did to FDR and the "New Deal."

No government is perfect. But government "of, by and for" the people is the best ever devised by humankind. And the more "of, by and for" the people that government is, the better it is for the entire society.

The truth: The Chavez government--despite every effort to destroy it--achieved a 10% economic growth rate for five straight years, 2003-2008, and furthermore recovered quickly from the Bush Junta-instigated, worldwide depression, to a growth rate of over 5% (current). And they did this with NO CUTS TO SOCIAL PROGRAMS. In fact, their protection of social programs contributed to their quick recovery. (Hear that, President Obama?!) Inflation has been high but the government has now cut inflation by about a third. Inflation is decreasing and, what is perhaps more important, wages are stable or going up, and unemployment is low. Most of those people who have been lifted out of poverty (poverty cut in half, and extreme poverty by more than 70%) are now in school or in jobs with decent wages. Many of the visitors to the many new community health clinics are seeing a doctor for the first time in their lives. The society is on the uptick and has been for some time. New schools and universities being built; new housing for the poor being built and coming on line; all sorts of new projects and new infrastructure in progress, including, for instance, a new funicular into the hillside barrios, new community TV/radio stations, a new public news service and great expansion of existing projects, such as the wonderful Venezuela Children's Orchestra; and a feeling of happiness and sense of well-being and hope in the future that is so prevalent that it created that remarkable result in the Gallup "wellbeing" poll (5th in the world!)

One other crapass lie, in this lying liar's crapass article: Venezuela's oil production is determined by OPEC, of which it is a member. It has nothing whatever to do with how Venezuela's state oil company is run. It is pre-determined by the members of OPEC.

This article might as well have been written by Venezuela's rightwing opposition (or Exxon Mobil's p.r. wing). It is THAT bad. And the hell of it is that we really have to write off the Guardian as a progressive publication, at least on Latin America. Who's left? We lost the BBCons a while ago. As for the New York Slimes, they are worse than the Guardian. There is, quite literally, NO reliable news and opinion source on Latin America in the entirety of the established press.

Worse than reading this contrived, twisted, lying tripe, is the realization that the Guardian has been corporatized and now speaks for the interests of the U.K. and U.S. 1% and their traditional rapacious, murderous treatment of Latin America.

Oh, yeah, one more point: the perennial rightwing "talking point," the murder rate. The murder rate is extremely high ALL OVER Latin America. Venezuela is not unique in this respect, and, of course, the writer doesn't mention the efforts of the Chavez government to reduce it. Venezuela's problem is "street crime," not political assassination--like the U.S. client state, next door, Colombia, where labor leaders and other advocates of the poor are routinely murdered by rightwing death squads closely tied to the U.S. funded/trained military. The writer tries to imply that "street crime" in Venezuela is political, by using the word "assassination." It is not. It is "street crime" and it is gun-driven. (Venezuelans love guns.) The Chavez government has created a new police academy, to instill professionalism (and also respect for human rights) and to address police corruption. It has also, recently, started to curtail gun ownership.

No government is perfect. No government can solve all problems. I'd say that making Venezuela "THE most equal country in Latin America," achieving all of its Millennium goals, creating "THE best election system in the world," and giving its citizens a sense of wellbeing and faith in the future, are HUGE accomplishments of the people and its chosen leaders, and, whatever other problems there are will at the least be seriously addressed, and maybe even solved, "of, by and for" the people when that population decides to do so.

I can't say the same for my own country. We have massive problems here that our people are being PREVENTED from solving, by the transglobal corporate monsters, war profiteers and banksters who are calling all the shots and even got hold of the vote counting with corporate-run 'TRADE SECRET' voting machines in every state. We want better distribution of income. We can't have it. We want better schools and attention to "the commons" (our public infrastructure). We can't have it. We want medical marijuana and, indeed, an end to the corrupt, murderous, failed "war on drugs." We can't have it. We want single payer health care. We can't have it. We want good wages. We can't have them. We want jobs--and they get outsourced to China and other slave labor markets. We want local businesses and strong community centers, and they get destroyed. We want to ban assault weapons and clips that can tear into our five years old's at SIX BULLETS PER SECOND, and we can't have even that. Nothing we want can we have. And it looks like we may lose even more of our agreed upon, mutually paid for, social protections--Social Security and Medicare, for instance--before this Corporate Junta is over.

You gotta wonder at the corporate media and these bloggers going to so much trouble to revile and lie about the Chavez government in Venezuela--which at least is making serious efforts at responding to the will of the people--when the "developed" world is in so much trouble, in so many ways, including grave loss of democratic and human rights principles, with the United States in the lead as to troubled places--a country where not even kindergarten classes are safe from mass murder and where the government has forgotten all about international law. The "developed" countries are like a house of cards--economically and politically--very fragile, indeed--while the Latin American Left tries to build a firm foundation for their societies, where in everyone has a chance, the weak are cared for and the government is on the side of the people against the looters, the liars and the war profiteers. The Venezuelan people were, indeed, the pioneers of that historic leftist democracy movement--which has spread to Brazil, Argentina, Bolivia, Ecuador, Uruguay and other countries--and they do not deserve to be called stupid peasants whose votes can be "bought." That is an undeserved slander of a people who have taught the rest of us what democracy is all about. We should be so lucky as to have a government, such as they have created, which threw Exxon Mobil out of their country!

26. I agree that it is a hit piece

he murder rate is extremely high ALL OVER Latin America. Venezuela is not unique in this respect, and, of course, the writer doesn't mention the efforts of the Chavez government to reduce it.

What has Chavez done to address it? While it is high all over Latin America, isn't it true that it has shot up under Chavez? What do you think Chavez's reasoning was for declining to report the number anymore?

27. You OPEC assertion is incorrect

33. Wow, that was quite an essay!

You can think what you'd like, of course, but by any objective measure, Chavez has, with the help of corrupt cronies, squandered a fortune that was obtained as a consequence of a steep rise in oil prices. No one save maybe you disputes this.

Last I checked, the Guardian was coming from the left (they were the go-to publication for anything disparaging of the BushCo crime family) , so if they have a problem with someone on that end of the perspective, it just might be because the guy is a bit of a crook and consorts with crooks to consolidate his power.

Oh, and "stupid peasants?" You're the one that made that suggestion--just you. No one else.

He's a dictator. A Robin Hoodish sort of hood, but a dictator nonetheless. He'll be a dead dictator before too long and then it will get really interesting, I suspect--not so much because of the opposition, but because of the pretenders on his team that want to try to grab his mantle and his populist aura amongst the poorest and run with that.

His country, despite access to great wealth as a consequence of that sludgy black gold, is poorly run, corrupt, and crime-ridden, with a murder rate that is off the charts. Inflation is off the leash, the economy is an abject mess. It didn't have to be that way, but his mismanagement and employment of cronyism and other corrupt practices over the last decade and a half made that happen. In the end, it'll be the next guy's problem--and it will continue to be the problem for those who are too poor to be able to afford to leave.

34. And the people in the middle continue to emigrate.

The professionals leave, and the people coming in to VZ? They're poor and uneducated, looking for a bit of that oil-based social welfare. It's not a sustainable model. How many bootleg DVDs can anyone sell on the street?

Venezuela is in the throes of an immigration puzzle. While large numbers of the middle class head for the exits, hundreds of thousands of foreign merchants and laborers have put down stakes here in recent years, complicating the portrait of how a brain drain unfolds.

The opposing tides reflect the increasingly polarized nature of the country. The government of President Hugo Chávez, who recently declared an “economic war” against the “bourgeoisie,” has expropriated 207 private businesses this year — including banks, cattle ranches and housing developments, according to Conindustria, a Venezuelan industrial association — prompting many to seek safer havens elsewhere.

“I feel like I can finally breathe again,” said Ivor Heyer, 48, the owner of a boat manufacturing company, who recently moved his entire operation to Colombia, creating more than 100 jobs there. “I’ve gone from a country where fear is constant over crime and state takeovers to a place that actually welcomes companies involved in something other than oil.”

At the other end of the economic spectrum, many new immigrants continue to arrive on tourist visas and overstay their visits, drawn by incomes that are still higher than those in some of Venezuela’s neighbors and by a broad array of social welfare programs for the poor championed by Mr. Chávez’s government.